249 posts categorized "Global"

Sunday, February 22, 2015

We'll learn tonight which of eight films -- American Sniper, Birdman, Boyhood, The Grand Budapest Hotel, The Imitation Game, Selma, The Theory of Everything, and Whiplash -- that the Academy Awards voters have deemed as 2015's Best Picture.

Las Vegas odds makers say it's a tight race between Birdman and Boyhood, with the Michael Keaton comeback movie having a slight edge over Richard Linklater's innovatively filmed look at a boy and his family.

UPDATE: Birdman was the big winner. Get full Oscars results at the awards' website.

From a tax perspective, however, all of the flicks already are winners.

And the tax credit winner is: All eight films got some degree of government subsidy, but American Sniper, the Clint Eastwood/Bradley Cooper collaboration based on the life of military sniper Chris Kyle, got the lion's share of tax help.

Sniper received a $6.8 million tax credit from California, more than any other Best Picture nominee could have been eligible for, according to Russell. In fact, he notes, this tax credit is larger than the entire production budgets of two other Best Picture contenders, Whiplash and Boyhood.

Plus, writes Russell, American Sniper also filmed some scenes in Morocco, which cut production costs by lowering its value added tax (VAT) rate by 20 percent.

You've got to love the irony of American Sniper, which is the overwhelming film favorite of Red State moviegoers, at least according to Facebook chatter examined by the Wall Street Journal's Washington Wire blog, getting the biggest cut of government money.

Folks in those more politically conservative locations tend to be, at least theoretically, against government handouts.

Apolitical tax breaks: But politics aside, as much as is possible when you're talking movies and money, many productions companies -- be they making movies, television shows, online programming or video games -- depend on tax breaks.

The Examiner's table shows just how much help the eight Best Picture nominees of 2015 received to make their movie magic happen.

Critics of production film credits say they don't work as envisioned. In worst case scenarios, they are rife with fraud.

But movie makers and lawmakers alike still love them. So look for the tax credits to continue.

And we tax geeks and movie lovers will be watching tonight to see which film gets the best tax credit return on investment at the Oscars.

As is so often the case with this pontiff, he focused on Dec. 25 on the struggles of those with in dire straits -- abused children, refugees, hostages and others suffering from violence worldwide.

Just a few days earlier, in his Christmas greeting to the Curia, he accused the group of cardinals, bishops and priests who make up the church administration of suffering from spiritual Alzheimer's, forgetting what drew them to the priesthood in the first place.

The Pope also chastised many in the church hierarchy of pursuing worldly power and of overly valuing belonging to a closed group.

"The economy and finance are dimensions of human activity and may be opportunities for encounter, dialogue, and cooperation," the Pope said. To do so, he added, "you must always put man at the center" instead of money.

"When money becomes the object and the reason behind every activity and initiative," continued Pope Francis, "then a utilitarian perspective and the savage logic of profit prevail."

That, warned the Pope, leads to "a collapse of the values of solidarity and respect for the human person."

Ultimately, said the Pope, accountants must be prepared and able to answer questions beyond a balance sheet.

"I encourage you to always work responsibly, fostering relationships of loyalty, justice, if possible, of fraternity, bravely confronting especially the problems of the weakest and of the poorest," said the Pope. "You must keep alive the value of solidarity as a moral attitude and expression of attention toward others who have legitimate needs."

The Pope's exhortations certainly will be a challenge to tax accountants as they face the upcoming filing season.

Sunday, November 23, 2014

In Russia, one of the contractors who helped get Sochi ready for the last Winter Olympics is facing tax evasion charges.

Oleg Shishov, CEO of the building firm Mostovik, is accused of falsifying tax documents from 2009 to 2012 in order to avoid paying more than 515 million rubles, or $10.9 million U.S., in taxes. Shishov could face up to six years in a Russian prison if convicted.

Investigators from the Department of Justice, Internal Revenue Service, Federal Bureau of Investigation, U.S. Postal Inspection Service and Social Security Administration cracked the ring, which allegedly used more than 1,000 student accounts at Miami Dade College. The refunds resulting from the fake filings, say federal officials, were deposited into various bank accounts controlled by the defendants.

I typically post my Bankrate Taxes Blog items on Tuesdays and Thursdays. If you miss them then and there, I usually post highlights and links here the following weekend.

That's not a surprise, notes the Tax Foundation, since all but one OECD nation levy value added taxes, or VATs, at relatively high rates.

Which is the lone non-VAT country? The United States.

Uncle Sam relies the most on individual income taxes. Combined federal, state and local taxes raised approximately 37 percent of all U.S. tax revenue in 2011, notes the Washington, D.C.-based tax policy group.

By comparison, individual income taxes in all other OECD countries accounted for around 24 percent.

Sunday, October 26, 2014

Italy's highest court on Oct. 24 overturned two lower court convictions that the duo had participated in what Italian prosecutors called a "sophisticated tax fraud" scheme.

Dolce and Gabbana had been found guilty in April 2013 of using a Luxembourg holding company to avoid paying taxes of €200 million ($253.39 million U.S. as of this morning's exchange rate) on royalties for sales in 2004 and 2005.

That sizable chunk -- I'm going with the more than $253 million U.S. dollars, not the euros amount -- of now-not-due taxes also is this week's By the Numbers figure.

End of long tax battle: The ruling by Rome's Court of Cassation determined that the designers committed no crime. It also cleared the duo's tax accountant, two managers and Dolce's brother.

Following the ruling, which wraps up a seven-year court battle, Gabbana took to Twitter to celebrate, announcing, "Eravamo certi!!! Siamo delle persone oneste!!!" In case your Italian is rusty, that translates, "We knew it!!! We are honest people!"

Tuesday, September 30, 2014

Fashionistas are wrapping up a month of shows that have taken them from New York to London to Milan and now Paris.

One big name designer, however, might not be paying as close attention as usual to the City of Light's catwalks this week. A couple of Prada executives have taxes instead of tailleur on their minds.

A month of global fashion weeks, during which designers preview their coming spring and fall clothing lines, concludes this week in Paris. Click the image for a glimpse of what the rich and famous might be wearing in early 2015.

Prada chairwoman Miuccia Prada Bianchi and her husband and company chief executive officer Patrizio Bertelli are being investigated by Italian authorities over past taxes.

The Italian Judicial Authority informed the couple that it has questions about alleged tax evasion related to the 10 years that Prada was based in the notorious tax-haven country of Luxembourg. Specifically, Italy's tax officials are interested in "the accuracy of certain past tax filings by them as individuals in respect of foreign-owned companies."

The company itself was the target of a tax investigation last year, after which Prada returned its holding company to Italy to appease the tax authorities. The haute couture company and its subsidiaries are not involved in this investigation.

The examination of the Prada executives is the latest look by Italian tax officials at alleged fashion house tax hi-jinks.

Domenico Dolce and Stefano Gabbana, founders of the eponymous Dolce & Gabbana fashion line, were convicted last year of tax evasion. They appealed and in April the two Italian designers were each given a reduced, suspended sentence of 18 months in jail.

Monday, September 29, 2014

I've been keeping a close eye on the United Kingdom for the last week because the hubby was in Scotland covering the Ryder Cup international golf tournament.

That event got a lot of attention, especially since it came on the heels of Scotland's vote to remain part of the UK. Then there was the European golfers' trouncing of their U.S. counterparts.

Now financial and tax folks are focusing on our closest European ally because of the decision by the UK's top financial officer to abolish its tax on some inherited pensions.

George Osborne announces to the gathering of the Conservative Party Conference in Birmingham, England, that he is ending the 55 percent tax on pensions left to family members. Video via Belfast Telegraph.

"There are still rules that say you cannot pass on to the next generation any of your pension pot when you die without paying a punitive 55 percent tax on it. Now I could choose to cut this tax rate. Instead, I choose to abolish it altogether," said UK Chancellor of the Exchequer George Osborne in remarks at today's (Sept. 29) session of the Conservative Party Conference in Birmingham, England.

"People who have worked and saved all their lives will be able to pass on their hard-earned pensions to their families tax free, effective from today," added Osborne, whose financial role is essentially the equivalent of the Treasury Secretary here in the United States.

'Today' actually means April 2015: While Osborne said the so-called death tax is dead "effective from today," the tax actually will be on life support for a while.

"The Chancellor today (Monday 29 September) announced that from April 2015 individuals will have the freedom to pass on their unused defined contribution pension to any nominated beneficiary when they die, rather than paying the 55% tax charge which currently applies to pensions passed on at death."

The pension tax currently applies to untouched "defined contribution" amounts left by those aged 75 or older, as well as to pensions from which money has already been withdrawn.

The change is estimated to cost the UK treasury approximately £150 million ($190 million U.S.) per year.

Younger workers' benefits cut, too: While older UK residents and their families might cheer the pension tax change, others aren't so thrilled with some of Osborne's other announced fiscal moves.

Osborne told his party's assembly that some workers' benefits would be frozen for two years. Affected programs include the Jobseeker's Allowance, Income Support, Child Tax Credit and Working Tax Credit, and Child Benefit and Employment Support Allowance.

That austerity move is projected to save more than £3 billion pounds ($3.81 billion U.S.) a year. That amount, in conjunction with £25 billion pounds ($31.7 billion U.S.) in annual spending cuts, is aimed at eliminating UK's deficit.

As expected, Labour Party members denounced the moves. They accused the conservative Tory Party of choosing to reward the richest one percent with billions in tax cuts, while cutting tax credits that make work pay for millions of striving families.

"While working people have seen their wages fall by £1,600 ($2,030 U.S.) a year since 2010, the Tories have once again shown they are the party of a privileged few at the top," a Labour member told BBC News.

Sound familiar, my fellow Americans?

Anti-estate tax advocates and government benefit foes in the United States will be closely watching how these moves in the United Kingdom play out, both politically and economically.

Tuesday, September 23, 2014

I was a novice reporter back in February 1979 when thousands of American farmers converged on Washington, D.C.

That 18-day tractorcade through messy winter weather produced not only global recognition of U.S. farming issues, but also an office for the organizing American Agriculture Movement in the nation's capital.

We also ultimately got Willie Nelson's Farm Aid concerts.

Since that angry grassroots beginning, AAM has played a part in shaping federal ag legislation.

In addition to general tax policy complaints, they are concerned about falling prices, brought about in part by a Russian embargo on some Western goods in the wake of the Ukraine crisis.

The French farmers, however, took a more aggressive approach in the country's Brittany region, where farming and the food industry are major employers.

The demonstrations escalated last week when around 100 farmers used their tractors to haul and dump unsold produce, mostly artichokes, potatoes and cauliflower, along with manure in the streets of Morlaix.

But they didn't stop there.

Click image to view France24 video, complete with lead-in ad in français (story is in English).

They set fire to an agricultural insurance office outside the Breton town, as well as burned the local tax office to the ground.

Media reports from the area said that the farmers blocked a main Morlaix road in both directions, preventing firefighters from getting to the blazes.

Not cool, guys. Not cool at all.

Protests are fine. They often are the only way to accomplish worthy goals.

But destruction of property -- even that occupied by the hated tax collector -- not only is criminal everywhere in the world, it also overshadows your message and undermines your credibility.

Thursday, September 11, 2014

This still painful anniversary of the Sept. 11, 2001, attacks on U.S. soil is underscored today by the recent killings of Americans abroad by Islamic State terrorists.

President Barack Obama, dignitaries, Sept. 11 survivors, rescuers, and victims' relatives marked the opening of the 9/11 Memorial and Museum at Ground Zero in New York City on May 15. Video courtesy Channel 2, CBS, New York via YouTube.

Taxes and terror: Taxes are a part of that continuum. So the Internal Revenue Service has put together a special Web page and this month revised Publication 3920, Tax Relief for Victims of Terrorist Attacks. Each details the available tax relief for victims of terrorist attacks and their families.

In general, victims, survivors and some dependents of those killed during the attack 13 years on the World Trade Center Towers, the Pentagon and United Airlines Flight 93 that crashed in Pennsylvania may be eligible to claim certain types of tax relief.

That same possible tax relief also is available to those affected by the Oklahoma City bombing in 1995 and the 2001 anthrax terrorist attacks.

Here, according to the IRS, are the basics of the various terror-related tax relief provisions.

Disability payments to survivors: Disability payments, including Social Security Disability Insurance (SSDI) payments, aren't taxable if they're for injuries incurred as a direct result of any terrorist attack against the United States or its allies.

However, taxpayers must include in income any disability payments received or that would have been received in retirement if the individual hadn't become disabled as a result of a terrorist attack.

Tax forgiveness for those who died: Federal income tax liabilities of people who died from wounds or injuries related to the Oklahoma City or Sept. 11 attacks are forgiven. Federal income tax liabilities of people who died from an illness related to the 2001 anthrax attacks are also forgiven.

Income tax is forgiven going back to 2000 (1994 for victims of the Oklahoma City attack) whether a person was killed in an attack, died later as a result of an attack or by participating in rescue or recovery operations.

Minimum amount of relief: A minimum of $10,000 in relief is provided if the deceased person's total tax forgiveness is less than $10,000. Publication 3920 has more on which years are eligible for a credit or refund.

If you have specific questions about tax forgiveness, payments to survivors or disability payments related to a terrorist attack, you can call the IRS Special Services Hotline toll-free at 866-562-5227. The telephone line is open Monday through Friday from 7 a.m. to 7 p.m. local time.

Our thoughts and prayers go out to all the victims and their families. So do our fervent hopes that one day soon such tax considerations won't be necessary.

The Tax Foundation expanded the data, including the top corporate tax rates for 163 countries. The Washington, D.C.-based nonprofit also looked at the average top marginal corporate tax rates and trends by region and the distribution of worldwide corporate tax rates.

Breaking down the numbers: In its report on which the map is based, the Tax Foundation found that the U.S. corporate tax rate of 39.1 percent -- that's the federal tax rate of 35 percent plus the average tax rate among the states -- is the third highest of the 163 surveyed countries.

Topping the tax list is the United Arab Emirates at 55 percent, with Chad in second place at 40 percent.

Overall, the Tax Foundation found that the U.S. tax rate is 16.5 percentage points higher than the worldwide average of 22.6 percent.

By region, Europe has the lowest average corporate tax rate at 18.6 percent. Africa has the highest average tax rate at 29.1 percent. That's not a surprise, says the Tax Foundation, as larger, more industrialized countries tend to have higher corporate income tax rates than developing countries.

Tax rates have declined: And there is good global tax news.

The worldwide average top corporate tax rate has dropped. The current 22.6 percent was 29.5 percent a decade ago.

Even better, every region in the world has seen a decline in its average corporate tax rate in the past 10 years.

Daily Tax Tip

Did you miss a daily tip posted above? No worries. They're collected in the 2015 Daily Tax Tips pages, one for each month of the filing season: January, February, March and, coming soon, April. And stay tuned for Weekly Tax Tips, coming after we survive the April 15 filing deadline!

Sponsored Links

Counting Down to Tax Day

Tax filing day 2015 will be here before you know it, but our countdown clock to the 11:59 p.m. April 15 deadline will help make sure you don't miss it.

Time for Tax Tasks

March 1: It's March, the last full month of tax-filing season. Are you attacking your tax return like a lion? Or have the Internal Revenue Code's complexities turned you into a tax lamb?

Either way, you're at the right place. The following tax tips are for filers regardless of March animal avatars.

If so and you received $20 in tips in February, use Form 4070 to report them today to your employer. And don't forget to include the value of atypical tips.

March 16: Business filers generally beware the Ides of March because the 15th day of this month also is the corporate tax filing deadline, which can be dangerous to a company's bottom line. This year, however, the deadline day was on a Sunday, meaning that business taxpayers must file and pay any due tax by today.

March 17: It's St. Patrick's Day! But don't trust lucky charms to get you through a tax audit. Be prepared by, among other things, making sure you have sufficient documentation for all your tax claims and hiring a tax pro with audit defense experience to guide you through the process.

March 20: Spring has sprung! Not only is it time to finally welcome warmer weather, any spring cleaning also could pay off on your 2015 tax return. Get rid of all your unnecessary household items and clothes that no longer fit by donating them to your favorite nonprofit. You can claim the value as an itemized charitable deduction.

March 25: If you celebrated your 70½ birthday last year (and who doesn't have parties for half birthdays?) and didn't take money out of your tax-deferred retirement accounts by the end of 2014, you must make a specified withdrawal by April 1. No joke. These required minimum distributions, or RMDs, are Uncle Sam's way of finally getting his piece of your traditional IRA, workplace 401(k) or self-employed retirement plan pie.

March 31: You've put the finishing touches on your 1040 and are finally ready to file. Wait! Take one quick review of your forms to ensure you haven't overlooked any tax breaks or made any common tax mistakes. All's good? Then drop your return in the snail mail box or hit enter to e-file.

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I am a professional journalist who has been covering tax issues since 1999. I am not a professional tax preparer. The content on Don't Mess With Taxes is my personal opinion based on my study and understanding of tax laws, policies and regulations. It’s provided for your private, noncommercial, educational and informational purposes only. It’s not a recommendation of any specific tax action(s) you should take. Similarly, mentions of products or services are not endorsements. In other words, my ramblings on the ol' blog are free advice and you know what they say about getting what you pay for. That's why when it comes to filing your taxes, I urge you to get additional, professional, paid-for guidance from an accountant, Enrolled Agent or other qualified tax professional who is familiar with your individual tax circumstances.

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